1.

CSR and integrated triple bottom

line reporting in Italy: case study
evidence
Andrea Melis, Silvia Carta, Silvia Del Rio

INTRODUCTION

Corporate social responsibility (hereafter CSR) is a term that involves

several different concepts and definitions (for example, Carroll, 1979,
1999; Crane and Matten, 2004). The definition provided by the Green
Paper (European Commission, 2001: 8) seems to summarize the essential
points of the concept, as the integration by companies of:
social and environmental concerns in their business operations and in their
interaction with their stakeholders on a voluntary basis. Being socially respon-
sible means not only fulfilling legal expectations, but also going beyond com-
pliance and investing ‘more’ into human capital, the environment and the
relations with stakeholders.

Socially responsible companies are expected to integrate economic,

social and environmental concerns into their business strategies and their
activities, going beyond compliance with the law. CSR is not philan-
thropy. Parmalat was very philanthropic, but was not socially responsible,
as emerged from the 2003 scandal.
In Italy the social responsibility of firms has roots dating from long
before the emergence of the CSR movement during the last decades of the
twentieth century. Article 41 of the Italian Constitution, promulgated in
1948, provides a basis to foster the social responsibility of private corpora-
tions, as it underlines how economic activity should not be undertaken if
it conflicts with social usefulness or in any way that it brings any form of
damage to human security, freedom and dignity. Furthermore, the same
article clearly states that ‘the law may determine suitable programmes and
controls so that the economic activity could be addressed and coordinated
towards social purposes’.
The academic debate about CSR has a long tradition in Italy, partly
due to the influence of Catholic values within some mainstream academic

9
10 Corporate social responsibility

circles. Onida (1968) provided the first modern contribution to this topic
with his normative theory of ‘simultaneous maxima’ (teoria dei massimi
simultanei), according to which, companies should maximize the value
of all corporate stakeholders, rather than focusing on financial perform-
ance and shareholders’ value. From a normative perspective, Masini
(1970) argued that profit does not represent the final aim of a firm, but is
instrumental in satisfying the needs of shareholders and workers. Coda
(1985) pointed out that firms that seek profit maximization at the expenses
of stakeholders’ value are likely to have their financial sustainability
constrained in the long term. Catturi (1994) endorsed a global added-
value approach, similar to the triple bottom line (see Elkington, 1997),
by arguing that a company creates value only if it satisfies all human
needs, that is, the wealth captured by consumers, employees, and sup-
pliers of capital exceeds any external costs (such as environmental costs)
imposed on the surrounding community or on others who are not direct
participants in the enterprise.
Industrial districts and small and medium-sized enterprises (SMEs) have
engaged in sustainable forms of conducting business through the conver-
gence of the interests of shareholders, employees, senior management and
the local communities (Canarutto and Nidasio, 2005).
A recent survey conducted by Perrini et al. (2006), which selected 395
Italian companies that were likely to be ‘CSR sensitive’, found that the
most frequent CSR activities carried out by the Italian companies ana-
lysed are: training activities (89 per cent), safeguarding employees’ health
(82 per cent), support of the local community (72 per cent), support of
cultural activities (70 per cent), and control of product safety (67 per cent)
and its impact on the environment (62 per cent). These companies have
usually adopted CSR tools such as employee involvement programmes
(83 per cent), sponsorships (75 per cent) and donations (51 per cent). As
for the reasons that encouraged companies to adopt socially responsible
behaviour, the most frequent advantages indicated by the companies
were: (i) benefits to company image (90 per cent), (ii) opportunity to
improve relations with the local community (76 per cent) and (iii) ethical
motivations of senior management (56 per cent).
CSR reporting is a central charter for public relations in communicat-
ing an organization’s socially responsible activities and in creating mutual
understanding with its stakeholders in order to achieve legitimacy.1
In addition, stakeholder-oriented reporting, which integrates financial
reporting with social and environmental reporting in a single annual
report, plays an active role in constructing the underlying ideas and
notions of CSR. Such integrated reporting carries out a relevant role to
crystallize abstract concepts, and to help visualize company’s activities.
 CSR and integrated triple bottom line reporting in Italy 11

Thus it substantially contributes to making the ‘stakeholder philosophy’

viable and reliable, and influences company behaviour (Zambon and Del
Bello, 2005).
This chapter provides a case study which describes CSR practices in an
Italian company. Sabaf is a family business, as are most Italian companies,
and has already been mentioned as a significant case concerning CSR in
Italian companies (see Bergamin Barbato and Mion, 2004; Borgonovi,
2005). In 2003, Sabaf was named as one of the Italian companies more
committed to CSR by 10 of the largest Italian institutional investors
(Avanzi SRI Research, 2003). Sabaf adopts a triple bottom line approach
in its activities and reporting, that is, it takes into account and provides
information to its stakeholders about its financial, social and environmen-
tal performance. Sabaf is included in the list of companies in which ethical
funds which operate in accordance with the Ethibel2 evaluation can invest
as well as in the Kempen SNS SRI index.3 The company obtained the ISO
140014 certification in 2003 and has complied with SA 80005 since 2005.
Sabaf prepares its social report according to the guidelines of the Global
Reporting Initiative (hereafter GRI) (2000, 2002), the GBS guidelines
(2001),6 and the AccountAbility 1000 (AA1000, ISEA, 1999; AA1000SES,
ISEA, 2005).7 Furthermore, Sabaf complies with the Global Compact
principles.8

COMPANY PROFILE AND CORPORATE

GOVERNANCE

Sabaf Società per azioni (S.p.a.) was founded in the immediate post-
Second World War period in Lumezzane (Lombardy, Italy) by Battista
Saleri and his sons (Sabaf stands for Saleri Battista and sons). The
company began its manufacturing activity in the brass industry, and soon
focused on producing valves for gas cooking appliances. In 1993 Giuseppe
Saleri, son of Battista, bought the shares from some of his brothers and
took over control of the company. In 1998, Sabaf was listed on the Italian
Stock Exchange. Nowadays, Sabaf is a worldwide leading manufacturer
of components for household gas cooking appliances, with a market share
of approximately 50 per cent in Europe and a global share of about 10 per
cent. Its core market consists of the manufacture of household appliances,
in particular of cookers, hobs and ovens.
In 2006 the Sabaf group comprised its parent company (Sabaf S.p.a.)
and four other wholly owned companies: Sabaf Immobiliare S.r.l. and
Faringosi-Hinges S.r.l., both based in Italy, Sabaf do Brasil L.t.d.a.
(Brazil), and Sabaf Mexico SA de cv (Mexico). Sabaf has approximately
12 Corporate social responsibility

600 employees and over 50 per cent of its consolidated turnover comes
from export sales. Therefore it may be considered to be a relatively small
multinational group.
Despite the fact that the Saleri family, via Giuseppe Saleri Società in
accomandita per azioni (S.a.p.a.), still controls 53.81 per cent of the com-
pany’s voting shares and has three of its members on the board of direc-
tors, since 1994 the family has delegated the chief executive officer position
to a professional manager, Angelo Bettinzoli. This was due to the decision
of the major shareholder to separate ownership and management, with the
latter delegated to senior managers led by the CEO.
The corporate governance structure is part of Sabaf’s overall approach
to social responsibility, as claimed by the company in its corporate govern-
ance report. Good corporate governance should ensure that a corporation
performs better and has a better relationship with its stakeholders. In its
corporate governance report, the company clearly states:

The model adopted is based, in the first place, on the decision to achieve strict
separation of the interests and choices of the key shareholder (the Saleri family)
from the interests and choices of the Company and Group, consequently
entrusting corporate management to managers not forming part of the key
shareholder. In order to reinforce this decision, the Saleri family . . . has under-
taken, also via signature of an accompanying agreement, not to hold, executive
offices . . . within Sabaf Group companies. (Sabaf, 2006a)

Since 2001, Sabaf has chosen to belong to the so-called STAR

(Segmento Titoli ad Alti Requisiti) segment, a mid-cap (middle capi-
talization) corporate governance segment which contains ‘shares with
high requirements’, that is, listed companies that choose to comply with
superior standards of internal control and monitoring.9 This choice has
forced Sabaf to comply with stricter transparency and disclosure rules on
corporate governance.
Sabaf adopts a traditional Italian board structure, characterized by a
board of directors and a board of statutory auditors (see Melis, 2004).
Both boards are appointed through the shareholders’ general meeting.
Sabaf’s board of directors comprises 11 directors. Six of them are non-
executive directors, including five who are considered as independent
(Table 1.1). Both the Compensation Committee and the Internal Control
and Audit Committee are exclusively composed of non-executive direc-
tors, the majority of whom are independent. Both committees are chaired
by a non-executive director, who cannot be considered as independent
according to the strict definition of independence chosen by the Italian
Code of Conduct on Corporate Governance (Committee for Corporate
Governance, 2006, para. 3.C.1), which excludes the independence of
 CSR and integrated triple bottom line reporting in Italy 13

Table 1.1 Board of directors and board committees at Sabaf S.p.a.

Board of directors Internal Compen-

Control sation
Position Name Executive Non- Independent
and Audit committee
executive
Committee
Chairman Giuseppe X
Saleri
Deputy Giambattista X
Chairman Saleri
Deputy Ettore Saleri X
Chairman
CEO Angelo X
Bettinzoli
Director Alberto X
Bartoli
Director Leonardo X X X
Cossu
Director Franco X X
Carlo Papa
Director Salvatore X X
Bragantini
Director Federico X X
Alberto Giua
Director Raffaele X X
Ghedini
Director Flavio X X
Pasotti

Source: Elaborated from company data – updated at July 2007.

company directors who have been in their position for more than nine
years during the last 12 years.
In accordance with the recommendations of the Italian Code of Conduct
(ibid., para. 2.C.3), Sabaf set up a lead independent director position, as
the chairman’s position is covered by a controlling shareholder.
Despite the fact that Sabaf complies with the key recommendations
of the Italian Code of Conduct, it has not set up a nomination commit-
tee. This choice is common among Italian listed companies, which are
characterized by the presence of a controlling shareholder (see Melis,
2006). However, in Sabaf the lack of a nomination committee is combined
with the fact that the voting list system (also known as ‘slates’) for the
appointment of directors has not yet been adopted.
The board of directors is wholly appointed by the Saleri family, with no
representation of minority shareholders. However, Sabaf will introduce
14 Corporate social responsibility

a slates system for the next board elections, in compliance with the 2006
Italian Consolidated Law on Finance. The purpose of this change is to
ensure that at least one member of the board is appointed by minority
shareholders.
The board of statutory auditors comprises three independent audi-
tors, one of whom, the chairman, has been appointed by the minority
shareholders, as required by Italian corporate law (Sabaf, 2006a).
The financial, social and environmental information provided by Sabaf
in its integrated annual report is audited by A.G.N. Serca, a local audit-
ing firm, for its financial content, and by KPMG for its social and
environmental content.

CORPORATE IDENTITY AND CHARTER OF

VALUES

Corporate identity is an organization’s members’ collective understand-

ing of the features presumed to be central, and relatively permanent, that
distinguish the organization from other organizations (Albert and Wetten,
1985), including the corporate ethos, aims and values that contribute to
differentiating the organization within its competitive environment (Van
Riel and Balmer, 1997). The clear definition of the main values and prin-
ciples that characterize an organization is the first step to defining what an
organization is and what it aims to be. The sharing and the identification
of a social group’s values and identity induce individuals to engage in, and
derive satisfaction from, the view of themselves as a member of the group
(Ashforth and Mael, 1989).
The definition of corporate identity in CSR aims to identify corporate
values and the commitments that a company purports to make towards
its stakeholders. CSR may be considered as a particular contract that the
company signs with its main stakeholders (Sacconi, 1999). The conditions
of this contract are the respect of the values and commitments stated either
in the company’s ethics code or in its charter of values. Sabaf, which has
never had an ethics code, published its charter of values in 2003.
According to Sabaf (2006b: 24), the charter of values is a ‘tool with
which the Sabaf board of directors expresses the values, standard of
conduct, and ways in which relations between Sabaf and its stakeholders
are managed’. It contributes to formalizing the corporate identity and
values, but provides fewer constraints to corporate actions than an ethics
code, as it excludes formal sanctions.
Sabaf prepared its charter of values according to the recommendations
of SEAN10 and IBS.11 Its charter is composed of five sections. The first
 CSR and integrated triple bottom line reporting in Italy 15

two are dedicated to a description of the company’s mission and values

which are summarized in the concept of shareholder value with respect to
environmental sustainability, promoting a continuing dialogue with the
different stakeholders.
Sabaf’s values have a central focus on individuals and on the respect of
the individual’s physical, cultural and moral integrity. Any alternative that
does not respect these values is to be rejected even if that alternative might
lead to economic benefits for the company. For example, Sabaf changes
its working-hour shifts during the Ramadan period, to allow its Muslim
employees to respect their religious rites.
The central focus on individuals is embedded with other commitments,
such as:

● promoting the values of thought and belief that express the com-
pany’s commitment to invest in the development of its employees’
skills, and to promote the innovation of its products;
● promoting the value of action, which expresses the commitment to
ensure the safety of its staff and customers through research and
development (R&D) of new systems that guarantee a continued
improvement of the processes and product quality. Sabaf is com-
mitted to promoting the safety culture through a communications
policy on the external environment;
● promoting the value of communication, which expresses the
commitment to conduct a continuing transparent dialogue with
its stakeholders. The different stakeholders are informed about
company policy and choices. Thus, they can monitor whether their
expectations are met.

The third section of the charter of values, ‘Principles of conduct’, con-

tains the principles that are intended to govern the behaviour of internal
and external Sabaf stakeholders. The key principles are:

● honesty: respect of the laws, internal and external regulations and

the charter of values;
● moral integrity: the assumption of moral behaviour in the face of
different forms of discrimination;
● equity: respect of impartiality in decisions with no discrimination in
relation to gender, sexual orientation, age, nationality, political and
religious beliefs;
● transparency and fair dealing: respect of transparent communica-
tion with different stakeholders to guarantee them the opportunity
to take decisions responsibly;
16 Corporate social responsibility

● efficiency and effectiveness; and

● dialogue: consulting stakeholders before taking a decision to reach a
solution in accordance with different interests.

The fourth section of the charter of values contains a description of

different stakeholders and the commitments made by Sabaf (see next
section).
The fifth section, ‘Enforcement of the charter’, describes the mecha-
nisms for the implementation of the charter of values. The first commit-
ment is to monitor the implementation of the charter and the diffusion of
values among stakeholders. To improve its charter of values, Sabaf revises
it periodically, and verifies its comprehensiveness as well as the coherence
of its activities (as reported in the integrated annual report) with its values
and principles. Stakeholders may report any violation of the charter of
values, by contacting the human resources manager (for employees) or the
internal auditor (for other external stakeholders).
The provision of a monitoring device is a signal of the company’s com-
mitments to respect the provisions of its charter of values, by involving
all its stakeholders. The existence of the charter is not ‘sufficient for its
enforcement but serves as the Constitutional Charter, expressing the
values for which Sabaf must strive, by way of conduct and decisions of
individuals and of the group as a whole’ (Sabaf, 2003a: 13).

VALUES DISTRIBUTION TO CORPORATE

STAKEHOLDERS

Sabaf published its first social report in 2000 (Sabaf, 2000). Since then it
has followed the guidelines suggested by GBS (2001), in accordance with
GRI indicators (GRI, 2000).
Zambon and Del Bello (2005) argued that the reporting process may
play an active role in putting CSR into practice: (i) directly, through the
narrative parts which contain definitions and descriptions of the stake-
holder-oriented activities performed, and/or (ii) indirectly, through the
structure and content of the data reported.
In its socially responsible management system, the Sabaf management
runs the company, taking into account its financial, social and envi-
ronmental impact. To do so, Sabaf implements ProGReSS©, a socially
responsible management system for sustainable development. Sabaf’s case
study shows that a social report is not only a communication device, but it
may also become a strategic management tool, in compliance with a triple
bottom line approach.
 CSR and integrated triple bottom line reporting in Italy 17

Table 1.2 Evolution of the structure of Sabaf’s social report

2000–2001 2002–2004 2005–2006

Social reporting Integrated reporting
Methodological Methodological 1) Identity and governance
introduction introduction
Corporate identity Corporate identity ● corporate identity
Sustainability ● sustainability
governance governance
Economic performance Economic 2) Operation and
performance management information
Social performance Social performance ● directors’ report on
consolidated financial
statements
Environmental ● directors’ report on
performance social and
environmental
performance
Dialogue with Dialogue with ● proposal for
stakeholders stakeholders improvement
● independent auditors’
report
Proposals for Proposals for 3) Consolidated financial
improvement improvement statements
Independent auditors’ Independent 4) Financial statements of
report auditors’ report Sabaf S.p.a.

Source: Elaborated from company data.

Evolution of Sabaf’s Social Report

From 2000 to 2006, Sabaf’s social report structure (see Sabaf, 2000–
2006b) has improved considerably, increasing its ability to disclose key
information to its users (see Table 1.2).
In 2000 and 2001, the social report was composed of the following five
sections (or chapters), preceded by a methodological introduction and
followed by a statement of procedural compliance (Table 1.2):

● corporate identity (history, vision, mission, strategy and corporate

governance);
● economic performance (allocation of added value);
● social performance (relationships with corporate stakeholders);
18 Corporate social responsibility

From 2000 to 2004

Financial Social report
statements
Financial
Performance Social and
Environmental
Performance
Financial and social
communication

From 2005 to 2006

Integrated reporting
Triple bottom line
communication

Financial Social Environmental

performance performance performance

Source: Elaborated from company’s data.

Figure 1.1 Sabaf’s step to triple bottom line reporting in 2005

● dialogue with stakeholders (Sabaf is open to criticism by its

stakeholders); and
● proposals for improvement (commitments to its stakeholders to
improve its activities).

From 2002 to 2004 the methodology remained consistent, while the

social report’s structure changed. Sabaf began to differentiate between
financial, social and environmental performances. In fact, information
about these issues was already provided, but the revised structure made it
more understandable. Two new sections were added:

● sustainability governance, which contained information about cor-

porate governance and the social responsibility management system
(previously contained in the section ‘Corporate identity’); and
● environmental performance (previously contained in the section
‘Social performance’).

Sabaf began to prepare and present its annual reports in accordance

with a triple bottom line approach, in which social and environmental
outcomes were as important as financial results (Figure 1.1).
Since 2005, Sabaf has prepared an integrated annual report (see Sabaf,
2005, 2006b), that is, one single document in which financial reporting has
 CSR and integrated triple bottom line reporting in Italy 19

been integrated with social and environmental reporting. Sabaf’s CEO

explained the decision of preparing and presenting a single integrated
annual report as follows:
The choice we have made is the result of an important consideration, which is
this: the Corporate Social Responsibility Report constitutes ‘certification’ of a
certain type of ethos, the opportunity to assert the centrality of the individual
in business strategies, and the desire to demonstrate that, whilst pursuing its
legitimate interest in profit, Sabaf also helps to improve the quality of people’s
lives. And if this is true, accounting data and social impact cannot be assessed
separately – as if they were two separate topics, to be addressed in detached
documents on separate occasions. They are, on the contrary, two aspects that
are directly and tightly linked. (Sabaf, 2005: 4)

Since 2005, Sabaf’s integrated annual report has comprised four sec-
tions (Table 1.2). Social and environmental information is contained in
the first and second sections, with the exception of the directors’ report on
consolidated financial statements.

Identification of Stakeholders

In accordance with Freeman’s (1984) definition, Sabaf identifies its stake-

holders as follows: ‘all those groups of individuals – consisting of indi-
vidual persons, organizations and communities – that directly influence the
company’s business or that are directly or indirectly affected by it’ (Sabaf,
2006b: 57).
In its socially responsible management approach, Sabaf interacts with
all its stakeholders, both internal (employees and shareholders) and exter-
nal (customers, suppliers, creditors, public administration, competitors,
the community, and the environment), engaging with all of them. Sabaf
acknowledges that a socially responsible company cannot be self-account-
able (Sabaf, 2003b: 120). Thus, it seeks to understand its stakeholders’
expectations, engages with them, and submits itself to their judgement. To
do so, Sabaf implements the AA1000 standard (1999) to build an effective
approach to stakeholders’ engagement, which fosters companies’ commit-
ment to a longlasting relationship with stakeholders. In particular, Sabaf’s
dialogue with stakeholders follows the AA1000SES (2005)12 guidelines.
Figure 1.2 illustrates Sabaf’s relationships with its stakeholders.
Stakeholders are represented closer to or farther from the company,
depending on the size of influence that the company’s actions can have on
each of them. Sabaf identifies the following stakeholders:

● employees: all those who have a hierarchical relationship (or other

type of working relationship) with Sabaf, for example, business
20 Corporate social responsibility

Environment
Competitors

Suppliers
Employees
Creditors
Sabaf
Customers
Shareholders Public
Administration

Community

Source: Elaborated from company data.

Figure 1.2 Sabaf and its stakeholders

agents and other people who represent Sabaf in the outside envi-
ronment and look after the company’s relations with stakeholders.
They are biennially involved in a satisfaction survey, which estimates
employees’ identification with the company’s mission;
● shareholders: the majority shareholder (the Saleri family) and minor-
ity shareholders, such as Italian and international institutional inves-
tors, and private shareholders. Financial analysts and institutional
investors are involved via questionnaires and personal meetings
with senior management;
● customers: producers of domestic electrical goods, from large multi-
nationals to niche SMEs, who are involved in a biennial satisfaction
survey, via the corporate website, and personal meetings;
● suppliers: raw materials, machinery, equipment, goods, and services
suppliers, who are involved through biennial meetings and surveys;
● creditors: banks and other financial institutions that contribute to
the financial support of the company;
● competitors: companies which make components for domestic gas
cooking appliances;
● public administration: central government bodies and agencies,
regional governments, local authorities, and public agencies, which
 CSR and integrated triple bottom line reporting in Italy 21

Table 1.3 Evolution of identification of stakeholders

2000–2001 2002 2003–2004 2005–2006

Employees Employees Employees Employees
Shareholders Shareholders Shareholders Shareholders
Customers Customers Customers Customers
Suppliers Suppliers Suppliers Suppliers
Creditors Creditors Creditors Creditors
Public Public Public Public
administration administration administration administration
– – Competitors Competitors
Community* Community Community Community
– Environment Environment Environment

Note: * In 2000 and 2001, Community includes both people and the environment.

Source: Elaborated from company data.

are provided with copies of the analyses concerning emissions

released into the atmosphere by Sabaf’s factories;
● community: the local community, schools and universities, consum-
ers of household appliances and, more generally, the entire civil
society. Sabaf involves them through multi-stakeholder discussion
panels; and
● environment: the local territorial context in which the company carries
out its manufacturing activities and the wider environmental context
which is potentially affected by the group’s activities or products.

Sabaf’s identification and description of its stakeholders as well as its

evolution in the reports emphasize the company’s improvement in its man-
agement system and social and environmental reporting (see Table 1.3).
Two aspects are particularly important.
First, the inclusion of competitors in its stakeholders’ analysis represents
an example of the company’s commitment to follow its stakeholders’ sugges-
tions and put them into practice. Competitors have been considered as stake-
holders as a result of suggestions received in two different multi-stakeholder
discussion panels organized to present the 2002 social report. These meetings
were attended by representatives of creditors, customers and the local com-
munity, such as universities, trade unions and financial newspapers.
Second, the identification of the natural environment as a unique stake-
holder represents the result of an increased CSR awareness. Until 2001, the
environment was measured and analysed as a part of the local community
22 Corporate social responsibility

in the ‘Community’ section (see Table 1.3). Since 2002, the environment
has been assigned a specific section, ‘Environmental performance’, which
has been given the same importance as ‘Social performance’. Sabaf’s
environmental policy and impact have been analysed in more depth, by
reporting an increasing number of indicators. The choice of the company
to report its environmental policy and impact is the result of its com-
pliance with ISO 14001, a continuous-improvement-oriented standard,
based on the ‘plan–do–check–act’ methodology. Since 2002, environmen-
tal information has been provided in compliance with the first step of ISO
14001 (Plan). Since 2005, Sabaf has prepared an integrated annual report
and the environment has been inserted into the ‘Social and environmental
performance’ section, together with other stakeholders.

Stakeholders’ Policies, Provisions and Projects

Sabaf’s values focus on the central importance of individuals. This philos-

ophy is also perceived in its activities towards stakeholders. Table 1.4 lists
the main corporate policies and commitments towards its stakeholders,
its compliance with the main voluntary provisions, and key projects. The
most interesting aspects of stakeholder involvement concern employees,
shareholders, customers and the local community.
Sabaf seeks to support employee involvement by improving internal
communication.13 First, Sabaf has recommended that its production
managers and department supervisors behave responsibly and set an
example for all employees. Second, it has adopted an organizational com-
munication plan, aimed at fostering internal communication and analysis
of staff needs. Third, since July 2003 it has published a quarterly in-house
magazine whose purpose is to develop a continuous dialogue within the
organization. Last but not least, during the 2006 training sessions, struc-
tured group meetings and individual interviews were organized for middle
managers and for line teams. Practical aspects of the company’s operations
were discussed to ascertain the participants’ perceptions and concerns.
Sabaf is committed to enhancing shareholders’ value by guaranteeing the
company’s sustainable growth, and communicating strategies and policies in
a timely and transparent way. As a voluntary disclosure, Sabaf has approved
its Corporate Governance Handbook (Sabaf, 2006c), and complied with the
key recommendations of the Italian Corporate Governance Code. Given its
CSR commitment, the company has been included in the Ethibel list.
Sabaf is committed to providing safe and environmental-friendly prod-
ucts to its customers. In compliance with ISO 9001:2000, its quality
and environmental management systems are integrated. Sabaf’s quality
management system has the following aims:
 CSR and integrated triple bottom line reporting in Italy 23

Table 1.4 Policies, provisions and key projects

Stakeholders Policies Provision Key projects

compliance
Employees To foster: SA8000 To improve internal
flexible working OHSAS 18001 communication
hours; through:
respect for dissemination of
different cultures; information;
regular Organizational
information Communication
to trade union Plan;
representatives; ‘Living the Values’
permanent training project
training process;
the value of its
intangible assets
Shareholders To provide timely, Corporate To comply with the
thorough, and clear governance Italian Corporate
communication handbook Governance Code for
To respect listed companies
ethical values in
management
Customers To support long- ISO 9001:2000– To realize high-quality
term relationships Vision 2000 products with a low
which aid (Sabaf has environmental impact
innovation in had ISO 9001
components and certification since
finished products 1993)
Suppliers To monitor its Demand respect
supply chain (via for SA8000
the application principles
of the SA8000
standard)
To avoid any
exploitation of its
dominant position
Creditors To provide timely,
complete, clear,
and transparent
communication
and to ensure
total equality of
information
24 Corporate social responsibility

Table 1.4 (continued)

Stakeholders Policies Provision Key projects

compliance
Competitors To ensure integrity
in management of
business
To promote fair
competition,
respecting rights
relating to patents
and trademarks
To encourage social
responsibility
Public To ensure clear, To guarantee an open
administration prompt, complete dialogue with the
communication various authorities
To collaborate with to foster harmonious
institutions to ensure industrial development
the development of
safer products
Community To improve the To collaborate with
quality of life in the AIESEC, and with the
communities where University of Brescia
the company does To make donations
its business to local NGOs and
To make donations charities
to non-profit To commit to long-
associations distance adoptions
To contribute to
young people’s
education by liaising
with schools and
universities
Environment To promote the ISO 14001 (since To make energy-
development and 2003) saving products
use of eco-efficient
technologies and
products
To train employees To reduce hazardous
so that they are aware waste
of the environmental
aspects and impacts
connected with their
job
 CSR and integrated triple bottom line reporting in Italy 25

● to improve processes and products continuously, with special atten-

tion to environmental protection and employee safety;
● to involve partners and suppliers in the process of constant
improvement, which fosters innovation in components and finished
products;
● to enhance the value of human resources; and
● to improve business performance.

Sabaf aims to improve the quality of life in the communities where it

operates. It promotes action in the social, cultural, educational and sports
areas, by donating to non-profit associations or liaising with schools and
universities to contribute to young people’s education. For instance, since
2002 Sabaf has been collaborating with AIESEC, the world’s largest student
organization, which has been particularly active in promoting CSR issues.

SOCIAL AND ENVIRONMENTAL REPORTING AND

KEY PERFORMANCE INDICATORS

A section of Sabaf’s annual report, ‘Key performance indicators’, con-

tains a summary of financial and non-financial indicators. The latter
include human capital, structural capital, relational capital, and social and
environmental indicators.

Financial Indicators

The financial dimension of sustainability concerns the organization’s

impact on the financial conditions of its stakeholders and on the economic
system at local, national and global levels. Its importance is stressed in the
GRI guidelines (2002).
One core economic performance indicator14 is direct economic value gen-
erated and distributed which includes revenues, operating costs, employee
remuneration, donations and other investments in the local community,
retained earnings, and payments to capital providers and governments.
In the section ‘Key performance indicators’, Sabaf reports first the
main performance ratios based on its income statement, comparing the
results over a three-year period, then, the statement of the added value
and its allocation among different stakeholders, as recommended by GBS
guidelines (2001).
Nearly 50 per cent of the added value produced in 2006 was paid to
employees and staff as their remuneration. The section ‘Sabaf and its staff ’
explains the company’s commitment to employees and the composition
26 Corporate social responsibility

Donations
Company 0.1%
14.5%

Owner's equity Employees

14.6% 48.8%

Borrowed
capital 1.4%

Public
administration
20.6%

Source: Elaborated from 2006 company annual report.

Figure 1.3 Added value allocation

of their remuneration. Employees are hired according to the rules of the

Italian collective labour contract for the mechanical engineering indus-
try, supplemented by company-level agreements, which include addi-
tional fixed and performance-related remuneration for all employees. Its
Brazilian subsidiary guarantees a salary which is 17 per cent higher than
the Brazilian minimum salary.
Over one-fifth of the added value produced in 2006 is given to the public
administration via direct and indirect taxes. In addition, Sabaf claims that
it has never received government grants or any particular government aid
to support its business.
Some 1.4 per cent of the added value is paid to borrowed capital, which
includes interest for loans and others forms of financial support of the
company.
The remuneration of owners’ equity increased in 2006. Dividends are
14.6 per cent of the added value. Besides the distribution of an ordinary
dividend of €0.60 per share, Sabaf paid out an extraordinary dividend of
€1 per share. The extraordinary dividend was considered appropriate,
given the group’s financial position and strong cash generation.
Some 14.5 per cent of the value added is allocated to reserves as
remuneration for the company.
Donations amounted to approximately 0.1 per cent of the added value
 CSR and integrated triple bottom line reporting in Italy 27

in 2006. Sabaf mainly supported local social and humanitarian initiatives

in recognition of its commitment to the local community.

Human Capital

The first group of non-financial indicators referred to is human capital,

which includes personal attributes such as knowledge, skills and experience
(Roos, 1998). In particular:

● average employee age: reflects a constantly growing company and

the desire to hire young workers, giving preference to in-house train-
ing and growth rather than bringing in outside skills;
● employee high educational level: measures the number of graduate
workers and holders of higher education certificates to total employ-
ees. The section ‘Sabaf and its staff ’ reports on the complete staff
breakdown by educational qualifications. The company’s policy is
to offer traineeships in the mechanical engineering field to under-
graduates and high-school students;
● staff turnover: measures the ratio between number of leavers and
dismissed employees and the total of employees, as recommended by
performance indicators in ‘Labor Practice and Decent Work’ (GRI,
2002). Sabaf is aware of the fundamental importance of having a stable
and qualified workforce, therefore it monitors staff turnover; and
● average training hours per capita: measures the total training hours
to total employees, as recommended by GRI (2002). Sabaf con-
tributes to employee professional growth via a continuous training
process. The subsection ‘Training and internal communication’
contains a complete description of the hours spent on training. This
performance indicator is interrelated with the training investment to
sales ratio, which has increased in 2006.

Sabaf reports a continuous improvement of its human capital main

indicators since 2004 (see Table 1.5). For instance, the average employee
age, the average training hours per capita and the percentage of training
investment have all improved. These data seem to confirm the commit-
ment of Sabaf to promote the development of its staff ’s skills and its policy
of hiring young people.

Structural Capital

Roos (1998: 151) defined structural capital as ‘the extension and man-
ifestation of human capital into innovation, business processes and
28 Corporate social responsibility

Table 1.5 Human capital indicators

2006 2005 2004

Average employee age Years 33.8 34.3 34.6*
Educational level – high % 42.1 42.2 41.6
Staff turnover % 5.6 5.3 4.9
Average training hours Hours 29.0 26.0 27.0
per capita
Training investments/sales % 0.23 0.19 0.17

Note: * Excluding Sabaf do Brasil L.t.d.a.

Source: Elaborated from 2006 company annual report.

relationships with dealers and others’. Key structural indicators, which

concern investments and spending for intangible assets and quality of
products and processes, are:

● process engineering hours on total hours worked: measures the

hours with reference to R&D of new machines or products. It repre-
sents the time that the company spends on innovation;
● customer rejects: measures the number of customer charge-backs
and credit notes for returned goods on sales. Since Sabaf is com-
mitted to guaranteeing high-quality standards for its products, the
number of rejects is an important indicator to analyse the produc-
tion process and correct relevant errors; and
● sustained quality costs on sales: measures the number of customer
and in-house rejects on sales. This indicator provides information
about the quality of internal and external processes, and measures
their efficiency.

Sabaf reports an increase in investments in tangible and intangible assets

(see Table 1.6). The reduction of investments for quality may be explained
by the fact that measuring instruments and equipment had already been
acquired in previous years.

Relational Capital

Relational capital represent the relationships with internal and external

stakeholders (Roos et al., 1997). The main indicators adopted by Sabaf
are:
 CSR and integrated triple bottom line reporting in Italy 29

Table 1.6 Structural capital indicators

% – 2006 % – 2005 % – 2004

IT budget (investments + current 0.97 0.24 0.50*
expenditure)/sales
Employees with PC 41.60 40.50 36.30**
New product development hours/total 1.30 1.10 1.50
hours worked
Process engineering hours/total hours 3.00 3.80 3.90
worked
Tangible investments/sales 10.60 7.90 16.20
Intangible investments/sales 0.74 0.50 0.65
Current spending for quality/sales 0.14 0.12 0.09
Investments for quality/sales 0.07 0.20 0.12
Customer rejects 0.06 0.07 0.08*
In-house production rejects 0.41 0.36 0.42*
Substandard quality costs/sales 0.47 0.43 0.50*

Note: * Sabaf S.p.a. only. **Excluding Sabaf do Brasil L.t.d.a.

Source: Elaborated from 2006 company annual report.

● strike hours for internal reasons15 to total employees: measures

participation of employees in strikes. Sabaf shares information
and opinions with trade unions about issues such as hiring policies,
equal opportunities, and health and safety. The section ‘Sabaf and
its staff ’ contains the reasons for the strike hours with the percentage
of employee participation. In 2006, no strikes occurred in any of the
group’s companies;
● average sales per customer: measures the ratio between the total
sales and the number of customers; this increased slightly in 2006.
The section ‘Sabaf and its customers’ contains a complete sales anal-
ysis with a description of the number of countries and the customer
breakdown by sales class;
● indicators such as percentage sales to new customers, percentage of
sales to top 10 and top 20 customers: these monitor the relationship
between Sabaf and its customers, by measuring the incidence of the
main and the new customers. Sabaf aims to increase the number of cus-
tomers, but also to establish a longstanding relationship with them;
● the number of samples produced for customers and number of dif-
ferent stock-keeping units (SKUs) supplied to 10 major customers:
measures Sabaf’s effort to involve its customers in the innovation
process; numbers have increased. The distribution of samples helps
30 Corporate social responsibility

Sabaf to tailor its production process to its customers’ needs and

suggestions, thus consolidating its collaborative relationship with
them;
● customer complaints: measures the ability and promptness of Sabaf
to solve customer complaints. In 2007 Sabaf prepared a question-
naire targeting its main customers with the aim of estimating the
level of their satisfaction in relation to these aspects;
● purchases from certified suppliers: measures the percentage of pur-
chases from certified suppliers on total purchases. Sabaf involves
its suppliers in a process of constant improvement, encouraging
longlasting partnerships. Sabaf encourages its suppliers to adopt
CSR practices. For example, its suppliers are required to respect SA
8000 standard (2005) as a prerequisite to establishing a long-term
relationship;
● media presence: measures the number of times that Sabaf has fea-
tured in magazines and on websites, in newspapers and in other
media. In order to improve its external communication, Sabaf’s
website contains links to all articles appearing in the business media.
An increasing presence in the media enables Sabaf to announce its
social and environmental performance and its progress towards total
quality. Through the media, Sabaf divulges the technical character-
istics of the group’s new products and improves its external image;
● number of financial analysts following Sabaf stocks: measures the
attention of the financial market to Sabaf shares. Sabaf considers
financial communication crucial to its growth. In 2007 a ques-
tionnaire was prepared to estimate how the financial community
evaluated its choices on CSR and corporate governance. The results,
contained in the section ‘Sabaf and its shareholders’, were presented
to potential investors; and
● lawsuits against the group’s companies: measures the number of
legal disputes with its stakeholders. The absence of legal disputes is
a signal of the company’s social behaviour. At 31 December 2006,
legal disputes were underway with three employees.

Social Indicators

The main social indicators are:

● total employee headcount (men and women): measures the compo-

sition of employees and shows how Sabaf guarantees equal oppor-
tunity between men and women. The section ‘Labour practices and
decent work’ performance indicators (GRI, 2002) suggests that the
 CSR and integrated triple bottom line reporting in Italy 31

Table 1.7 Relational capital indicators

2006 2005 2004

Strike hours for internal reasons/ Hours 0 0 3.2
total employees
Average sales per customer €/000 436 425 426
Sales from new customers % 1.31 2.29 2.22
Incidence of top 10 customers % 47 52 53
Incidence of top 20 customers % 67 71 70
Samples produced for customers Number 1,182 717 919
Different product SKUs supplied Number 2,713 2,282 2,265
to top 10 customers
Customer complaints Number 324 274 280*
Certified supplier sales % 54.3 49.3** 49.9**
Media presence Number 279 274 223
Financial analysts following Sabaf Number 6 7 5
stock on an ongoing basis
Lawsuits against group’s Number 0 3 0
companies

Note: * Sabaf S.p.a. only. **Excluding Sabaf do Brasil L.t.d.a.

Source: Elaborated from 2006 company annual report.

composition of the board of directors and breakdown of employ-

ees per category according to gender, age group, minority group
membership, and other indicators of diversity should be reported.
In accordance with the law, Sabaf guarantees equal opportunity
to men and women. Although the percentage of female employees
has decreased since 2004, Sabaf still encourages a high presence of
female staff within the Italian metalworking and engineering sector;
● sickness rate: measures the percentage of sick leave hours to total
workable hours; this has remained constant over the years. This
ratio indirectly monitors the satisfaction of company staff and its
commitment to the company. The section ‘Sabaf and its staff ’ con-
tains a subsection ‘working hours and hours of absence’ in which
there is an explanation of the total hours of absence with the reasons
compared with the sector average. Sabaf points out, for example,
that the high number of maternity leave hours, compared with the
sector average, reflects the high percentage of female staff. The total
annual sick leave hours is lower than the sector average;
● accident frequency and gravity indices: indicators of safety. Sabaf
monitors the effectiveness of its efforts to safeguard the safety
32 Corporate social responsibility

and health of its employees. These indices have been significantly

reduced over the period analysed;
● job creation: measures the annual number of hirings and the compa-
ny’s commitment to create job opportunities and benefits for the local
community. The number of jobs created has constantly increased.
Indeed, its workforce has increased by 12 per cent since 2005;
● percentage of supplies bought from local suppliers: measures Sabaf’s
preference for local suppliers in order to allocate a significant part
of added value within the local community. The section ‘Sabaf and
its suppliers’ reports on the company’s commitment to support the
development of the territory where it operates by giving preference
to local companies in selecting suppliers. In 2006, the purchases
made in the local areas in which it operates accounted for some two-
thirds of the total; and
● donations on net profit: measures the percentage of profit that Sabaf
passes on to the community. Sabaf’s commitment to the community
is not only in the form of cash donations to humanitarian, sporting
and cultural associations, but is also manifested in the creation of
job opportunities and a ‘constant activity with regard to disseminat-
ing good corporate business practices’ (Sabaf, 2006b: 109).

Environmental Indicators

Sabaf considers that the environment is an important stakeholder. The

ISO 14001 certification is a significant step towards respect for the envi-
ronment in its production process. Products are made to guarantee the

Table 1.8 Social indicators

2006 2005 2004

Total employee headcount Number 594 531 507
Men % 64.3 62.9 60.7
Women % 35.7 37.1 39.3
Sickness rate % 3.4 3.5 3.3
Accident frequency index 20.47 20.76 38.65
Accident gravity 0.19 0.24 0.39
Jobs created Number 66 24 5
Supplier sales from suppliers in % 49.6 43.0 44.8
province of Brescia
Donation/net profit % 0.2 0.5 0.7

Source: Elaborated from 2006 company annual report.

 CSR and integrated triple bottom line reporting in Italy 33

greatest efficiency and the lowest consumption. The Sabaf annual report
contains several environmental performance indicators suggested by GRI
(2002), which include:

● materials used: measures the consumption of the main materials

(brass, aluminium alloys and steel) that Sabaf uses in its processes.
The consumption of aluminium alloys increased in 2006 as it has
several advantages over the production of brass valves, in terms of
energy saving, lower lead content of product, lighter product and a
consequent reduction of consumption for packaging and transport.
Products made with these materials are easily recyclable. The section
‘Sabaf and the environment’ contains a complete description of the
eco-efficiency of aluminium alloys compared with other materials
(such as brass and steel), as well as a description of the main prod-
ucts and their advantages in terms of innovation and improvement
of environmental performances;
● waste: measures the production of three types of waste – municipal,
hazardous and non-hazardous. The monitoring of these is impor-
tant with regard to improving environmental performance. In
2006, Sabaf achieved a drastic reduction of hazardous waste. Sabaf
planned a further reduction for 2007;

Table 1.9 Environmental indicators

2006 2005 2004

Materials used:
Brass Metric tons 4,937 4,373 4,795
Aluminium alloys Metric tons 7,039 5,625 5,629
Steel Metric tons 7,646 7,011 6,870
Waste:
Municipal-type waste Metric tons 130 134 219
Total hazardous waste Metric tons 1,252 3,216 3,978
Total non-hazardous waste Metric tons 7,527 6,148 6,305
Natural gas consumption M3 000 3,193 2,723 2,505
Electricity consumption MWh 24,279 20,553 18,889
CO2 emissions Metric tons 21,419 18,460 16,706
Current environmental % 0.47 0.48 0.53
spending/sales
Environmental investments/ % 0.08 0.35 0.09
sales

Source: Elaborated from 2006 company annual report.

34 Corporate social responsibility

● natural gas and electricity consumption: measures the consump-

tion of natural gas (a relatively clean energy source) and electricity.
Sabaf promotes the advantages of cooking with gas as opposed to
electricity, as the former is more efficient and more environment
friendly than the latter. The use of natural gas enables Sabaf to
reduce its emissions of greenhouse gases. The increasing use of
natural gas reflects the increase of in-house production in the pres-
sure die-casting and enamelling departments; and
● environmental spending and investments to total sales: measures
the percentages of the costs incurred and investments made that
Sabaf undertakes in order to safeguard the environment. The
section ‘Sabaf and the environment’ contains a list of the main envi-
ronment-related expenditures. The most relevant costs are related
to waste disposal. In 2005, Sabaf made an important investment
related to foundry water recycling plants, which have permitted a
significant reduction of waste.

CONCLUSIONS

Sabaf is a family-run manufacturing business group. Sabaf considers good

corporate governance as part of its overall approach to social responsibil-
ity, and thus decided that it should be listed on the Italian Stock Exchange
within the so-called STAR segment. It is included in the Kempen SNS
SRI index as well as in the list of companies in which ethical funds which
operate in accordance with the Ethibel evaluation can invest.
Sabaf adopts a triple bottom line approach in its activities and report-
ing, which has improved significantly since its first implementation in
2000. Since 2005, it has integrated financial reporting with social and
environmental reporting in a single annual report. This integrated triple
bottom line reporting plays a dual role: first, it helps Sabaf to monitor its
financial, social and environmental performance through several key per-
formance indicators, and second, it fosters Sabaf’s communication with
its stakeholders.
Sabaf’s management seems consistent with the definition of CSR stipu-
lated in the 2001 Green Paper of the European Commission. The improve-
ment in its reported performance from 2004 to 2006 demonstrates the
company’s commitment to translate its values into practice.
The only concern about Sabaf’s social responsibility is that most of its
CSR-related activities have little material negative impact on its financial
performance. Although Sabaf states that any potential alternative that
does not respect its core values would be rejected by its management, even
 CSR and integrated triple bottom line reporting in Italy 35

if it provided financial benefits to the company, we found no evidence

that its senior management has ever had to take such a decision. In other
words, we found no evidence that the Sabaf management has ever faced a
true CSR dilemma in recent years, that is a situation where pursuing social
and/or environmental performance would have meant restricting the
financial performance of the company in a material way, by either increas-
ing its costs or curbing its revenues. Thus, the evidence from the Sabaf case
study seems to be consistent with the so-called ‘enlightened stakeholder
theory’ view of the firm (see Jensen, 2002) according to which, senior man-
agement pursues a total long-term firm value by taking into account, at the
same time, the company’s relations with all important constituencies.

KEY LEARNING POINTS

Sabaf represents a case of good CSR practice in Italy. This case study has
illustrated how:

● Sabaf seeks to adopt a triple bottom line approach in its activities.

Senior management manages the group in accordance with the cor-
porate values stated in its charter of values, and states that any alter-
native that does not respect Sabaf’s values is to be rejected even if such
an alternative were to result in financial benefits for the company.
● Sabaf identifies its stakeholders and engages with them. The devel-
opment of a continuous dialogue with its stakeholders is considered
a sine qua non, as Sabaf is aware that a socially responsible company
cannot be self-accountable.
● Sabaf monitors its financial, social and environmental performance,
and communicates to its stakeholders by means of a single annual
report. The integration of financial reporting with social and envi-
ronmental reporting, also called triple bottom line reporting, repre-
sents a fundamental part of Sabaf’s social responsibility, as it plays
an active role in CSR.

DISCUSSION QUESTIONS

The following questions concern Sabaf’s attempt to be a socially respon-

sible company:

1. A socially responsible company cannot be self-accountable. Critically

discuss this statement using evidence from the Sabaf case.
36 Corporate social responsibility

2. What does a triple bottom line approach mean? How does Sabaf put
it into practice?
3. Who are the key corporate stakeholders? How does the Sabaf
management interconnect with each of them?
4. How can a company measure its social and environmental perform-
ance? Critically evaluate Sabaf’s triple bottom line reporting.
5. What active role is played by integrated reporting in CSR? Critically
discuss this, using evidence from the Sabaf case.
6. How is corporate governance linked to corporate social respon-
sibility?
7. To what extent does a company engage with its stakeholders to seek
social legitimacy rather than actual social responsibility? Critically
discuss this, using evidence from the Sabaf case.

ACKNOWLEDGEMENTS

We would like to express our gratitude to Chris Mallin for her comments
on previous versions of this work. This chapter is the result of a joint
effort of all three authors. In particular, Andrea Melis wrote the introduc-
tion and the section ‘Company profile and corporate governance’, Silvia
Carta wrote the sections ‘Corporate identity and charter of values’ and
‘Social and environmental reporting and key performance indicators’,
while Silvia Del Rio wrote ‘Values distribution to corporate stakeholders’.
Conclusions and key learning points are to be attributed to all authors
jointly.

NOTES

1. Legitimacy theory predicts that companies adopt environmental and social responsibil-
ity reporting (in addition to financial reporting) to legitimize their operations within the
society (see, for example, Epstein and Votaw, 1978).
2. Ethibel is an independent consultancy agency for socially responsible investments that
advises banks and brokers, offering ethical savings accounts and investment funds. In
order to guarantee the quality of such financial products, Ethibel has its own European
quality label. The criteria for the social–ethical company screenings, which shape the
characteristics of investment funds accredited with the Ethibel label, cover all aspects of
CSR.
3. Kempen SNS SRI is the first index for socially responsible European small-caps (com-
panies with small-capitalization).
4. ISO 14001 provides the guidelines for an environmental management system that
enables an organization to develop and implement a policy and objectives which take
into account legal requirements and information about significant environmental
aspects (ISO, 2004).
 CSR and integrated triple bottom line reporting in Italy 37

5. SA8000 (SAI, 2005) is a global social accountability standard for decent working condi-
tions, developed and overseen by Social Accountability International. It is based on the
UN Universal Declaration of Human Rights, Convention on the Rights of the Child
and various International Labour Organization (ILO) conventions.
6. GBS (Gruppo di studio per il Bilancio Sociale) is an Italian special interest group com-
posed of academics, auditors, and other CSR experts, which published the first Italian
guidelines for the preparation and presentation of social reports in 2001.
7. The AA1000 Framework was developed by the Institute of Social and Ethical
Accountability (ISEA) to help organizations build their accountability and social
responsibility through quality social and ethical accounting, auditing and reporting.
8. Global Compact is an international initiative that includes thousands of companies
together with UN agencies, labour and civil society to support universal environmental
and social principles.
9. The Italian Stock Exchange has attempted a market-based approach to improving
Italian governance in 2000 with the introduction of STAR (‘market for shares with
high requirements’), a mid-cap corporate governance segment which certifies listed
companies that comply with superior standards of internal control and monitoring. The
Italian Stock Exchange aimed to promote ‘good corporate governance’, by providing
discerning investors with the ability to immediately identify and invest in companies
that meet stringent corporate governance guidelines.
10. The Social and Ethical, Auditing and Accounting Network (SEAN) is an Italian con-
sortium founded by KPMG and a national consulting firm. Its aim is to promote a CSR
management system, ProGReSS©.
11. Founded in 1989, Istituto Europeo per il Bilancio Sociale (IBS) is an Italian private con-
sulting firm, whose activities have been focused on developing guidelines for preparing
and presenting social reports.
12. The AA1000 Stakeholder Engagement Standard (AA1000SES) is a generally applicable
framework for improving the quality of the design, implementation, assessment, com-
munication, and assurance of stakeholder engagement developed by the ISEA.
13. Sabaf assumes that its intellectual capital may be fostered through the reinforcement of
its human capital, via the increase of employees’ skills, identification and satisfaction.
Human capital fosters the development of its organizational capital (operational know-
how and process improvements) ensuring a further development of relational capital (in
terms of improving stakeholders’ engagement).
14. Performance indicators suggested by GRI (2002) are classified as core and additional
indicators. Core indicators are generally applicable and are assumed to be material
for most organizations. Additional indicators represent emerging practices or address
topics that may be material for some organizations, but not for others (ibid.).
15. These data do not include strike hours due to external reasons related to the renewal of
the national collective labour contract.

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USEFUL WEBSITES (WITH AN ENGLISH VERSION)

Global Compact, www.unglobalcompact.org.

Global Reporting Initiative, www.globalreporting.org.
Institute of Social and Ethical Accountability, www.accountability21.net.
International Organization for Standardization, www.iso.org.
Sabaf S.p.a., www.sabaf.it.
Social Accountability International, www.sa-intl.org.